Shri Jayesh navnit Desai L/h of late Sushila Navnit Desai, Valsad V. The Income Tax Officer, Ward-4, Valsad

ITA 226/AHD/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1638 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 05-05-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 01-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P CHAUDHARY
• Keywords: Principle of natural justice; Peak credit

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER ./ I.T.A. NO.226/AHD/2016 ( / ASSESSMENT YEAR : 2006-07) LATE SMT.SUSHILA NAVNIT DESAI LEGAL HEIR SHRI JAYESH NAVNIT DESAI MUKUND & CO. COMPOUND, N.H. NO.8 PARNERA, ATUL, VALSAD / VS. THE ITO WARD-4 VALSAD ./ ./ PAN/GIR NO. ABSPD 0372 J ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI TUSHAR P. HEMANI / RESPONDENT BY : SHRI O.P. CHAUDHARY, DR / DATE OF HEARING 05/05/2016 !'# / DATE OF PRONOUNCEMENT 10/05/2016 / O R D E R THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-VALSAD DATED 02/11/2015 PASSED FOR AY 2006-07 BY RISING FOLLOWIN G GROUNDS:- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS I N UPHOLDING THE ORDER OF LD.AO WITHOUT APPRECIATING THAT THE SHOW C AUSE NOTICE ISSUED U/S.148 OF THE ACT IN THE NAME OF THE DECEAS ED IS INVALID AND THE ASSESSMENT FRAMED ON THE BASIS SAD NOTICE IS VO ID AB INITIO. ITA NO.226/AHD/2016 LATE SMT SUSHILA NAVNIT DESAI VS. ITO ASST.YEAR 2006-07 - 2 - 2. ALTERNATIVELY AND WITHOUT PREJUDICE TO THE ABOVE SU BMISSION, THE LD.CIT(A) OUGHT TO HAVE APPRECIATED THAT THE LD .AO HAS ERRED IN LAW AND ON THE FACTS IN MAKING ADDITION OF RS.11,59,000/- ON THE ACCOUNT OF UNEXPLAINED CASH C REDIT. 3. ALTERNATIVELY AND WITHOUT PREJUDICE, ONLY THE PEAK BALANCE OUGHT TO HAVE BEEN ADDED. 4. BOTH THE POWER AUTHORITIES HAVE PASSED THE ORDERS W ITHOUT PROPERLY APPRECIATING THE FACTS AND THAT THEY FURTH ER ERRED IN GROSSLY IGNORING VARIOUS SUBMISSION, EXPLANATIONS A ND INFORMATION SUBMITTED BY THE APPELLANT FROM TIME TO TIME WHICH OUGHT TO HAVE BEEN CONSIDERED BEFORE PASSING THE IM PUGNED ORDER. THE ACTION OF THE LOWER AUTHORITIES IS CLEA R BEACH OF LAW AND PRINCIPLES OF NATURAL JUSTICE AND THEREFORE DES ERVES TO BE QUASHED. 5. THE LD.CIT(A) HAS ERRED IN LAW AND IN FACTS OF THE CASE IN CONFIRMING ACTION OF LD.AO IN LEVYING INTEREST U/S. 234A/B/C/D OF THE ACT. 6. THE LD.CIT(A) HAS ERRED IN LAW AND ON THE FACTS IN CONFIRMING THE ACTION OF LD.AO IN INITIATING PENALTY U/S.271(1 )(C) OF THE ACT. 2. THE MAIN ISSUE IN THIS APPEAL IS WHETHER THE ORD ER PASSED AGAINST A DECEASED PERSON. IT IS NOT IN DISPUTE THAT THE AS SESSEE DIED ON 14/08/2007. NOTICE U/S.142(1) OF THE ACT, 1961 ALO NG WITH A LETTER DATED 26/06/2013 ISSUED TO THE ASSESSEE WITH A REQUEST TO FILE HER (LATE SMT.SUSHILA NAVNIT DESAI) RETURN OF INCOME BY 15/07 /2013. ASSESSEE (SHRI JAYESH NAVNIT DESAI) IS A LEGAL HEIR OF LATE SHUSHILA NAVNIT DESAI. ITA NO.226/AHD/2016 LATE SMT SUSHILA NAVNIT DESAI VS. ITO ASST.YEAR 2006-07 - 3 - ASSESSMENT ORDER WAS RE-OPENED IN THE NAME OF LATE SHUSHILA NAVNIT DESAI, WHO HAS NOT FILED THE RETURN OF INCOME. IN FACT, SHE PASSED AWAY ON 14/08/2007 AND THE ASSESSING OFFICER (AO) COMPLE TED THE ASSESSMENT PROCEEDINGS U/S.144 R.W.S.147 OF THE INCOME TAX ACT , 1961 DATED 27/02/2014. THE AO WAS AWARE OF THE DEATH OF THE ASSESSEE (LATE SHUSHILA NAVNIT DESAI). 3. I HAVE HEARD BOTH THE PARTIES. WE FIND THA T IN A SIMILAR SET OF FACTS, THE TRIBUNAL (ITAT C BENCH, AHMEDABAD) IN THE CAS E OF HASMUKHBHAI K.BAROT VS. ACIT IN IT(SS)A NO.441/AHD/ 2011 FOR ASSTT.YEAR : BLOCK PERIOD 1990-91 TO 1999-2000 DAT ED 13/08/2015 HAS DECIDED THE ISSUE IN FAVOR OF ASSESSEE, BY OBSERVIN G AS UNDER:- 9. THIS ASPECT HAS ALSO BEEN CONSIDERED BY THE TRI BUNAL IN THE CASE OF SIKANDAR LAL JAIN EXTRACTED (SUPRA). THIRD MEMBER HAS HELD THAT SECTION 159(2) NOWHERE AUTHORIZE THE AO T O TAKE PROCEEDING AGAINST THE INDIVIDUAL WHO HAS ALREADY E XPIRED, THAT IS WHY THE LEGAL REPRESENTATIVE UNDER SECTION 2(7) ARE REGARDED TO BE ASSESSEE. THIS ASPECT CAN ALSO APPRECIATED BY AN EX AMPLE, VIZ. AN ASSESSEE DIED LEAVING BEHIND FOUR LEGAL REPRESENTAT IVES. THE AO ISSUED NOTICE ON THE DECEASED. ONE OF THE LEGAL REP RESENTATIVES PARTICIPATED IN THE PROCEEDINGS AND THE AO PASSED A SSESSMENT ORDER. ALL THE FOUR LEGAL REPRESENTATIVES HAD INHER ITED PROPERTY OF THE DECEASED. CAN TAX LIABILITY IMPOSED UPON THE DE CEASED ASSESSEE WILL BE RECOVERED FROM THE REST OF THE LEGAL REPRES ENTATIVES, WHO INHERITED THE PROPERTY, BUT DID NOT PARTICIPATE IN THE PROCEEDING, BECAUSE THEY HAD NOT RECEIVED ANY NOTICE ? SECTION 292BB WILL NOT HELP THE AO IN THIS SITUATION. THEREFORE, CONSIDERI NG FROM ALL ANGLES, WE FIND THAT NOTICE ISSUED BY THE AO UPON T HE DECEASED IS DEFECTIVE NOTICE AND NO VALID ASSESSMENT ORDER COUL D BE PASSED. ITA NO.226/AHD/2016 LATE SMT SUSHILA NAVNIT DESAI VS. ITO ASST.YEAR 2006-07 - 4 - RESPECTFULLY FOLLOWING THE ORDER OF THE ITAT IN THE CASE OF SIKANDARLAL JAIN (SUPRA), WE ALLOW THE FIRST GROUND OF APPEAL AND QUASH THE ASSESSMENT ORDER. 4. SINCE THE FACTS ARE SIMILAR AND ON THE SAME REAS ONING, WE FIND THAT THE AO HAS ISSUED NOTICE TO THE DECEASED ASSESSEE A ND FINALLY PASSED THE ASSESSMENT ORDER IN THE NAME OF LEGAL HEIR OF THE D ECEASED ASSESSEE. PROVISIONS OF SECTION 292BB WILL NOT HELP THE AO IN THIS SITUATION. CONSIDERING THE FACTS AND LOOKING TO THE TOTALITY O F THE CASE, WE FIND THAT THE NOTICE ISSUED BY THE AO TO THE DECEASED PERSON IS A DEFECTIVE NOTICE AND NO VALID ASSESSMENT ORDER COULD BE PASSED. ACC ORDINGLY, THE ASSESSMENT ORDER PASSED BY THE AO IS HEREBY QUASHED . RESULTANTLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 10 MAY, 2016 AT AHMEDABAD. SD/- ( SHAILENDRA KUMAR YADAV ) JU DICIAL MEMBER AHMEDABAD; DATED 10/ 05 /2016 &.., .(../ T.C. NAIR, SR. PS ITA NO.226/AHD/2016 LATE SMT SUSHILA NAVNIT DESAI VS. ITO ASST.YEAR 2006-07 - 5 - !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-VALSAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 5.5.16(DICTATION PAD 4+PAGE S ATTACHED WITH THIS FILE ) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 10.5.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 10.5.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER